The pandemic is making lifestyle planning a key concern for retirees – The Globe and Mail
COVID-19 has put a stop to many retirees’ travel and lifestyle plans for the foreseeable future. In turn, some financial advisors are stepping in to find ways to help clients spend their time during the pandemic.
“Most people, in our experience, are pessimistic about their way of living for at least the next two years,” says Robert Owens, chief executive officer, wealth management, at Owens MacFadyen Group in Saint John, N.B. “If your clients don’t prepare now and decide what they’re going to do instead, I fear many will find themselves with adverse mental health come midwinter.”
Most retirees are capable of weathering the financial storm without making significant adjustments to their portfolios. It’s how the pandemic will affect their lifestyles over the next year or two that has left many wondering what to do instead. And even if borders do open up, there’s no guarantee those who had travel plans will be able to obtain travel insurance that doesn’t exclude coverage for treatment of COVID-19.
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“If we continue to have flare-ups, I can’t imagine any insurance company wanting to carry that risk,” Mr. Owens says. “If you get COVID-19 and end up in [the intensive care unit] in the United States, we’re talking about several hundreds of thousands of dollars in medical bills. That will affect people’s thoughts about leaving the country for a long while to come.”
One suggestion advisors can make for clients who have money earmarked for travel is to put those assets toward renovations that make their homes more enjoyable and socially inviting before winter hits. These renos could include a new sun room, a home theatre, an outdoor hot tub and sauna, or a home gym.
“Find a way to help your clients beyond managing their money,” Mr. Owens says. “Be positive, reassure them that [the pandemic] will end and encourage them to find ways to be active – especially in winter.”
Daryl Diamond, a financial planner in Winnipeg who specializes in retirement income planning, has taken a unique approach to help clients build a new strategy during the pandemic. He asks his clients to create two bucket lists: one for things they’ve always wanted to do close to home and another that looks forward to the things they’ll be able to do once the pandemic ends.
“The second list isn’t a simple return to past plans,” Mr. Diamond says. “Some may sell their vacation property to eliminate indeterminate carrying costs and others may not want to step on to a cruise ship again for the rest of their lives. Their health may change. So, it’s time to think out of the box and pay attention to new alternatives.”
According to retirement lifestyle planner Susan Latremoille, founder of SuccessDNA in Toronto, paying attention to the non-financial aspects of retirement planning is a new frontier for advisors – especially for those who are looking to add value at a time of declining investment returns.
“When you provide a more holistic, value-added approach, you will get more loyalty,” she says. “It’s important to acknowledge the loss of control and disappointment they feel and help them find things to do that are meaningful to them, including short-term contract work.”
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Ms. Latremoille says COVID-19 has left companies in many industries reluctant to add permanent staff – and retirees are in a perfect position to take on a paid project, volunteer position, or a charitable cause that’s interesting and meaningful to them.
When you look at the big picture, Ms. Latremoille says the pandemic lockdown is a good dress rehearsal for those who are still working toward retirement or on the precipice of it. She draws a parallel between what people are experiencing during the pandemic to ill-prepared retirees when it comes to the non-financial, or lifestyle components of their retirement plans.
“There are some similarities between COVID-19 and retirement in terms of [the impact on a person’s] life,” she says. “After the honeymoon period of retirement is over, people can feel an enormous sense of loss of control and purpose as well as anxiety and isolation. The same thing has happened for many people during the pandemic lockdown.”
When clients are at work, their calendars are full of activities – from their daily workouts to lunch meetings. With people stuck working at home or working less because of the quarantine, that opens a door for advisors to motivate their clients to plan what they’re going to do with their time in advance of retirement.
“I sincerely hope people are hearing from their advisors as a voice of calm in the middle of the storm,” Mr. Diamond says. “Doing nothing, hunkering down and waiting it out is not a good strategy.”
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